The US has voiced support for Brazil in their "currency war" with China. US Secretary of the Treasury, Tim Geithner, has criticised undervalued currencies leading to Brazil receiving a disproportionate amount of global capital inflows.

The Brazilian currency, the Real, has been damaged by foreign investment and a increase of cheap Chinese imports.

The Chinese central bank has raised interest rates to 6.06% to tackle inflation.

The Chinese economy has experience strong growth, 9.8% in the past three months, however there are some bearish views from speculators who are predicting a housing bubble due to spiralling costs among other factors.

Monday, 7 February 2011

The Egyptian government is facing a financial dilemma as investors pull out their capital in response to the ongoing turmoil. After a bond auction today, Egypt failed to raise enough money. In response the Egyptian pound fell in value against the dollar and other currencies.

Copper broke through to $10,000 a tonne last month, with Religare speculating that it will increase to $11,000 at the end of the year. Possibly due to increase demand from China and a drop in copper supply.